What’s going on?
Elon Musk offered to buy Twitter on Thursday for $43 billion, as he dreams of a utopian internet where everyone can talk freely and openly – about him.
What does this mean?
Elon revealed two weeks ago that he’d bought a 9% stake in Twitter, which the company shortly followed with an offer of a spot on its board. But when he turned it down, analysts were quick to point out that the move would’ve limited him to a 15% stake, suggesting that he might want to launch a full-scale takeover. They were right: the world’s richest person – reportedly worth around $260 billion – offered to buy Twitter for $54.20 a share on Thursday (tweet this). That values the company at around $43 billion – 54% more than it was worth before Elon started investing. As for his intentions, he says Twitter needs to be taken private in order to make it a “platform for free speech around the globe.” God’s work, Elon: the world’s worst people have been too muzzled for too long.
Why should I care?
For markets: Twitter’s backed into a corner.
Twitter’s shares jumped 12% on the news, but there’s a catch: Elon has said he lacks confidence in current management, and would reconsider his position as a shareholder if his offer wasn’t accepted. Let’s say we take him at his word (a big if): the sale of his stake would probably send Twitter’s shares plunging toward the low-30s they sat at before this whole saga. That leaves Twitter with a decision to make: accept the offer, or accept its shareholders’ wrath.
Zooming out: Morgan Stanley could do with the work.
Musk hired Morgan Stanley to advise him on the deal, and it might be glad of the business: the firm reported on Thursday that its investment banking business – the segment that advises on deals and initial public offerings – saw its revenue fall 37% last quarter versus the same time last year, and its total profit fall by 8%.
Originally Posted April 14, 2022 – Man Of The Hour
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